Four former top executives of Lexington's Blue Grass Airport stood before Fayette Circuit Judge Pamela Goodwine and pleaded not guilty Friday morning to theft charges stemming from hundreds of thousands of dollars in expenses that the four billed the airport.
Former executive director Michael A. Gobb faces nine theft charges, and former director of administration and finance John Rhodes faces six charges. John Coon, the airport's former director of operations, and John P. Slone, who was director of planning and development, have been charged with one count each of theft. The airport board forced the four men to resign last winter.
A pre-trial conference for the four was set for Dec. 3, and a status hearing was set for Dec. 18.
Attorney Patrick Nash of Lexington, who represented Gobb, said later in the day that it was fascinating that the arraignments came a day after state auditor Crit Luallen released a report of her office's audit of expenditures by officials of the Kentucky Association of Counties. Luallen's office found $3 million in questionable expenses in three years by KACo leaders. But she said those expenditures apparently were not illegal. She said her office was not forwarding the KACo report to law enforcement as it did with an airport audit report because KACo officials did not try to deceive their board with their flagrant spending.
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"Yesterday, you have Luallen making a public announcement that what the KACo people did was not criminal. Then, Ms. Luallen described what she thinks the KACo people did. It's precisely the same as what she claims the airport people did," Nash said.
"As a defense attorney I'm going to be looking very closely at the basis for her conclusion that this isn't criminal conduct."
At Friday's arraignment of the former airport officials, prosecutors presented each defense attorney with compact discs and a stack of papers several inches high containing discovery information.
Included in the discovery materials were spreadsheets with credit card, expense report and direct payment information; copies of reimbursement check requests and reimbursement checks; copies of consents to search electronic devices; copies of investigators' interviews with airport officials, former airport officials and others; and copies of Herald-Leader articles. Two of the compact discs were titled "Gobb Photos" and "Gobb letters."
While there were references to interviews conducted with Coon, Rhodes and Slone in a listing of discovery items, there was no listing with Gobb's name and the word "interview" after it.
Nash, who is not the first attorney to represent Gobb on matters stemming from the airport spending case, said that, to his knowledge, Gobb has not been interviewed by investigators. The attorney said his normal practice when he has a client under investigation is to not permit that client to be interviewed. He said he could not comment as to whether there have been requests for interviews with Gobb while Nash has been his attorney.
Before entering their pleas, Coon and Rhodes sat near each other in the front row of spectator benches in the courtroom. Slone sat just behind them. Gobb, no longer sporting his familiar mustache, sat near the back on the other side of the room. Gobb passed Coon on his way out of the courtroom, and the two spoke.
Law enforcement agencies had been investigating spending at the airport for more than nine months before the indictments came down Oct. 20. The Herald-Leader reported earlier this year that the top five leaders of the airport, including the four in court Friday, spent more than $530,000 on travel, meals, entertainment and other expenses over three years.
In February, Luallen described the pattern of spending as "shameful" as her office's report detailed more than $500,000 in undocumented and questionable expenses made by seven airport officials — including the four arraigned Friday — from Jan. 1, 2006, through Dec. 31, 2008. Her office referred the case to law enforcement before the audit was completed.
Only three of 15 total counts against the four men gave any hint of specific wrongdoing. One theft charge against Gobb was related to an instance in summer 2006 in which he directed Amy Caudill, the airport's manager of marketing and community relations, to place a charge on her credit card. No specifics about the charge were provided.
Another said Gobb directed Coon to make a charge on Coon's airport credit card in late 2008.
And one count naming Gobb, Coon and Slone relates to a 2004 trip to a strip club in Texas owned by Millennium Restaurants, at which the three men were present. The group charged the airport $5,080 at the Dallas club, the Herald-Leader previously reported.
The other charges accuse Gobb and Rhodes of committing theft of items or services worth more than $300 and list only the time frame in which the thefts occurred.
The airport's operating expenses come from a combination of revenues from shops, parking fees, ticket charges and landing fees. It also gets some state and federal funds.
Each charge is a Class D felony, which carries a prison sentence of one to five years. If a defendant is convicted of multiple counts, a judge decides whether the sentences should be served concurrently or consecutively. There is a 20-year maximum.
By early August, the airport had received reimbursements totaling thousands of dollars from Gobb, Rhodes, Coon, Slone and others as well as thousands of dollars worth of merchandise. Rhodes had repaid the most — more than $21,000. Gobb had repaid more than $4,800. Coon had repaid more than $1,100 and Slone had repaid nearly $3,400. All of the money repaid by Coon and nearly $2,300 of the total repaid by Slone were for the Texas strip club visit.